IN THE INCOME TAX APPELLATE TRIBUNAL
"C" Bench, Mumbai
Before Shri Vijay Pal Rao, Judicial Member and
Shri D. Karunakara Rao, Accountant Member
ITA No. 2741/Mum/2013
(Assessment year:2008-09)
Income tax Officer-20(2)(3) M/s. Om Trinetri Builders and
Piramal Chamber Contractors
Room No.411, 4th Floor, Vs. 7/14, United CHS, Koldongri
Lalbaug, Parel Andheri (E)
Mumbai-400 012. Mumbai-400 069.
(Appellant) (Respondent)
Permanent Account No. : AAFO 3066 E
Assessee by : Ms. Vinita Shah
Revenue by : Shri Shrikant Namdeo
Date of hearing : 10/07/2014
Date of Pronouncement : 18/07/2014
ORDER
Per Vijay Pal Rao, Judicial Member:
This appeal by the revenue is directed against the order dated
29/01/2013 of CIT(A) for the assessment year 2008-09. Revenue has
raised the following grounds:-
"1. The ld. CIT(A) has erred on the facts and circumstances of the
case and in law in directing the AO to allow deduction u/s.
80IB(10) amounting to Rs.16,37,770/-
2. On the facts and circumstances of the case and in law, the ld.
CIT(A) has erred on not considering that the Assessee has not
fulfilled the conditions prescribed in section 80IB that the built up
area of unit should not exceed 1000 sq.ft.
3. The CIT(A) has ignored in ignoring the fact that a survey u/s.
133A was carried out in the case wherein after physical
verification it was noticed that certain flats sold were exceeding
1000 sq.ft. area thereby violating the condition laid down in the
section 80IB of the Act.
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4. The appellant prays that the order of the CIT(A) on the above
grounds be set aside and that of AO be restored."
2. The only issue raised by the revenue is regarding allowing the
claim of deduction under section 80IB(10) despite the fact that the
assessee sold two combined units to one purchaser thereby exceeding
the area of 1000 sq.ft.
3. We have heard the ld. DR as well as the ld. AR and considered the
relevant material on record.
4. At the outset it was submitted by the ld. AR of the assessee that
an identical issue has been considered and decided by this Tribunal in
assessee's own case for the assessment year 2006-07 and 2007-08 vide
order dated 05/05/2012 in ITA No.7147 & 48/Mum/2010 in para-5 to 7
as under:-
"5. We have heard the rival submissions. As far as approval of
the Slum Rehabilitation Authority is concerned we find that CBDT
has issued a notification dated 3/8/10, whereby it is now notified
that any scheme approved under Regulation 33(10) of DCR for
Greater Mumbai 1991, and by the SRE for Slum Rehabilitation
would be valid for the purpose of Clause- a and b of section 80 IB
(10) of the Act. We are of the view that it would be appropriate to
set aside the order of the CIT(A) on this issue and restore the same
to the AO for consideration of the issue afresh in the light of the
notification issued by the CBDT.
6. As far as the individual flats exceeding the built up area of
more than 1000 sq. ft. is concerned we find that the Co-ordinate
Bench of the Tribunal in the case of Emgee Holding Pvt. Ltd. vs.
DCIT, (2011) 12 Taxman.com 468 (Mum) has held as follows:
"It was noted that the size of each fiat, as evident from
building plan as duly approved by Municipal authorities,
was less than 1,000 sq. ft. It was not even revenues case
that each of flat on stand alone basis was not a residential
unit. Even flats were constructed or planned in such a way
that two flats could indeed be merged into one larger unit, as
long each flat was an independent residential unit, deduction
under section 80-lB (10) could not be declined. What section
80-lB (10) refers to is `residential unit' and in the absence of
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AY: 2008-09
anything to the contrary in the Act, the expression
`residential units' must have the same connotations as
assigned to it by local authorities granting approval to the
project. The local authority had approved the building plan
with residential units of less than 1,000 sq.fi. and granted
completion certificate as such. There was no ambiguity about
the factual position. Further, the prohibition against sale of
more than one flat in a housing project to members of a
family has been inserted specifically with effect from 1-4-
2010 and, said amendment in law can only be treated as
prospective in effect. So far as pre-amendment position is
concerned, as long as residential unit has less than
specified area, is as per the duly approved plans and is
capable of being used for residential purposes on stand
alone basis, deduction under section 80-IB(10) cannot be
declined in respect of the same merely because the end
user, by buying more than one such unit in the name of
family members, has merged these residential units into a
larger residential unit of a size which is in excess of specified
size. It is useful to take note of legislative amendment by
virtue of which the legislature put certain restrictions on sale
of residential units to certain family members of a person
who has been sold a residential unit in the housing project.
Section 80-IB(10) now provides an additional eligibility
condition that in a case where a residential unit in the
housing project is allotted to any person being an individual,
no other residential unit in such housing project is allotted to
any of the following person, namely (1) the individual or the
spouse, or the minor children of such individual, (ii) the HUF
in which such individual, is a karta' (iii) any person
representing such individual the spouse or minor children of
such individual, or the HUF in which such individual is a
karta. [Para 7]
It is clear that the amendment has been brought with
prospective effect from 1-4-2010, and there is no indication
whatsoever to suggest that these restrictions need to be
applied with retrospective effect. The amendment seeks to
plug a loophole but restricts the remedy with effect from 1-4-
2010, i.e., assessment year 2010-11. The law is very clear
that unless provided in the statute, the law is always
presumed to be prospective in nature. It will, therefore, be
contrary of the scheme of law to proceed on the basis that
wherever adjacent residential units are sold to family
members, all these residential units are to be considered as
one unit. If law permitted so, there was no need of the
insertion of clause (f) to section under section 80-lB (1 0) It
will be unreasonable to proceed on the basis that legislative
amendment was infructuous or uncalled for - particularly as
the amendment is not even stated to be for removal of
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doubts': On the contrary, this amendment shows that no
such eligibility conditions could be read into pre-amendment
legal position. [Para 8]
In view of aforesaid discussion, the deduction under section
80-lB(10) was to be allowed to the assessee entirely. [Para
9)"
7. In the present case admittedly the amended provisions of law
will not apply and, therefore, so long as per the plans approved by
the concerned authorities, the built up area of each flat is less
than 1000 sq.ft. the deduction under section 80IB(10) of the Act
cannot be denied to the Assessee on the ground that two flats as
per approved plan lying adjacent to each other have been
combined into one flat and owned by one owner or jointly with
some of the members of his family. In this regard we also find
from the approved plan copy of which is at Page 66 of the Paper
Book that as per the approval the built up area of each flat is less
than 1000 sq.ft. In the circumstances we hold that the rejection
of the claim of the assessee for deduction under section 80 IB(10)
on this account cannot be sustained."
5. There is no dispute that there is no change in the facts relevant to
the issue under consideration for this assessment year as well as for the
assessment years 2006-07 and 2007-08. CIT(A) has allowed the claim of
the assessee by following the order of this Tribunal in assessee's own
case for the assessment year 2006-07. Accordingly following the order of
this Tribunal in assesse's own case we decide this issue in favour of the
assessee and against the revenue.
6. In the result, appeal of the revenue stands dismissed.
Order pronounced in the open court on 18th July, 2014.
Sd/- Sd/-
(D. KARUNAKARA RAO) (VIJAY PAL RAO )
ACCOUNTANT MEMBER JUDICIAL MEMBER
Mumbai, Dated: 18/07/2014.
Jv.
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Copy to: The Appellant
The Respondent
The CIT, Concerned, Mumbai
The CIT(A) Concerned, Mumbai
The DR " " Bench
True Copy
By Order
Dy/Asstt. Registrar, ITAT, Mumbai.